It is clear from reading overseas news that NZ is doing far better than most countries in the world still struggling with the Covid-19 virus. Our country, being an island surrounded by sea has acted as a moat for us and as we are able to control our borders, unlike many other countries in the world, we have had a natural advantage. Our very disciplined approach as a population during full lockdown also managed the virus that had come here well, (if not perfectly) and we now drive around, go to work, spend time with friends and family with virtually no restrictions within the country and have a quarantine system in place for all Kiwis arriving home. Aside for 3-4 people breached that quarantine, stupidly and selfishly, we have continued the run of luck of having no community spread of the virus for in excess of 60-70 days now.
Contrast that to the tough new 6-week full lockdown in the state of Victoria in Australia to see how better we are faring! While some businesses and industries here have taken terrible financial hits, most outside those particular ones are only off about 15% in revenue which is very fortuitous. No doubt there is more damage to come post the Sept wage subsidy extension expiry but the overall view is we could have been much, much worse off.
It has also given time to many businesses and people to reflect on how they want to live, from now on with Work from Home parts of peoples jobs being accepted by many businesses as a new way forward and accordingly commercial property vacancies may rise and returns may decline as less space is needed to house teams of people. Downsizing may become the term for the commercial and office space for a few years yet.
In residential housing, first home buyers have been rampant with a huge surge in activity and sales from this sector of the market due to the 80 year low in mortgage interest rates which coupled with prices not rising that sharply in the under $800,000 price level means the chance for many to buy their first home is better than for many years.
The property development scene is surging also as builders chase plots of land to fully utilise the Unitary Plan attributes.
And so let’s talk statistics – recent 12 month averages have been published that talk glowingly about price increases but as with all stats it really depends if you understand how they are calculated and how the media and commentators “spin” them.
As Covid-19 only caused a cessation of activity in mid-March, a 12-month average will not give a true representation for many months yet as the real estate market was lifting strongly from Sept-Feb so this is still keeping the 12-month average prices up. If anecdotal evidence shows less sales activity and prices soften in the months of April-Aug as example, this will take until say Oct/Nov to affect the “average” price downwards so as always, treat statistics with great care. I have a feeling the market is not so rosy out there as the media may be saying but time will tell.
But it is a market with lower listings and plenty of buyers so in some ways that is a sellers’ market – as long as the property is well presented and marketed, it will attract interest. Lesser properties with a specific issue or two may see high viewing interest but very few offers. As always, the key to maximising your property value is to use a professional with experience of different markets over a decade or two and who can demonstrate superior marketing skills and aptitude as “Marketing is Everything”.